Even as $BNB has not been able to meet price predictions, it has been able to do one thing- which is regaining its $50 billion market valuation it first attained in April. Despite Binance exchange 16th token burn that held last week, the price of $BNB has not moved as anticipated. According to Binance, the crypto exchange behind the BNB token, it destroyed almost 1.3 million BNB in its latest quarterly-based token burn.
Under normal circumstances, price spikes succeed token burns conceptually known as deflationary mechanism. The general belief is that if a token undergoes deflationary mechanism, and the demand for the token increases, the most likely result is a massive spike in the price of the token. This gives the token more value than it recorded before the token burn. However, this has not happened in the recent 1.296 million BNB tokens taken out of circulation by Binance through burning.
Notwithstanding, BNB has regained its $50 billion market capitalization, placing it among the top four valuable cryptocurrencies currently, after flagship cryptocurrency, Bitcoin, Ethereum and the largest stablecoin, Tether (USDT). After trading below $230 in late May, BNB has made a comeback to the $300 price mark and attained an ATH of $308 within the early hours of Monday. Though this over 50% below its ATH of $685 during the market rally of early May.
Price of BNB Attains 700% Increase Since 2021
Despite the disappointing outcome of Binance’s latest token burn, a thorough analysis would reveal that BNB has performed amazingly well since the start of 2021. BNB was barely above $40 and had a market valuation of $8 billion in January. Now, the token has since surpassed initial expectations and seen a massive 700% increase due to previous token burns and other factors.
Prospects for BNB are high that the price may reach the $1000 price mark as the global crypto community anticipates a bullish trend in the coming months. In fact, the token was able to attain a $100 billion market cap in May, making it one of the few cryptocurrencies to do so.
Another contributing factor to the surge of BNB since the year began is the unprecedented traffic recorded in the decentralized finance space. Both the actual BNB and its BEP20 variant have come in handy for activities such as staking, liquidity farming, including transactions fees on DeFi protocols.
Binance Exchange Undeterred by Regulatory Storm
Binance also celebrated its 4th anniversary last week, amid that regulatory storm it has experienced in the last few weeks. It seems like the exchange is riding atop the storm and remains unaffected by the unsavory events. Binance became a victim of regulatory crackdown in the UK, which saw it quit operations in the country. Regulatory bodies in the US and Thailand are also prowling about the activities of the exchange. Following these events, Binance has assured users of its cooperation with regulatory powerhouses. CEO of the crypto exchange, Chanpeng Zhao (CZ) also declared in a recent statement that ‘Compliance is a Journey.’
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